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How to get your money from Rice’s ‘568 cartel’ lawsuit settlement

By Prayag Gordy     3/5/24 10:54pm

Rice settled a class action lawsuit in February for $33.75 million. The complaint alleged that Rice and 16 other elite universities illegally conspired to limit financial aid. Rice settled before trial — as do the vast majority of civil cases — and the university denies any wrongdoing.

Ten of the 17 universities have settled so far, each for a larger sum. The settlements currently total $284 million. An estimated 200,000 current and former students at the universities are eligible for the settlement payments, including many Rice students and alumni.

The plaintiffs estimate that the average claimant will receive $2,000. You can’t yet file a claim, but you can register for updates from the settlement administrator to stay on top of the news.

Here’s what to know.

How do I get my money?

The court preliminarily approved Rice’s settlement in a Feb. 28 filing. The court also approved the settlement website and notice plan. The court-appointed settlement administrator — in this case, the Angeion Group — will start to use emails and addresses from Rice’s directory information to reach out to eligible students and alumni.

Rice students and alumni since Fall 2003 could be eligible for the settlement. Specifically, you must be a U.S. citizen or permanent resident who received need-based financial aid covering some — but not all — of your tuition, fees and room and board. (If you received a full ride, any allegedly improper limits on financial aid wouldn’t have affected you.)

The court-approved settlement website is financialaidantitrustsettlement.com. You can click “register for updates'' to be notified when you can apply for the settlement class.

The amount of money you could receive depends on a number of factors, the settlement website says. Overall, the Angeion Group estimates that if half the 200,000 eligible people submit claims, the “average claimant” will receive about $2,000.

What did the plaintiffs allege?

Generally, antitrust law prohibits “anticompetitive practices” that could cheat consumers out of lower prices (or, in this case, higher financial aid packages). The goal is to “keep prices down, and keep quality up,” according to the Federal Trade Commission.

Federal law provided some universities an exemption through Section 568 of the Improving America’s Schools Act of 1994. Groups of schools could collectively employ “common principles of analysis” for financial aid calculations — so long as all the universities were need blind.

However, it turned out that some universities were not truly need-blind. Vanderbilt University, for instance, may have been need-aware when admitting students from its waitlist.

The plaintiffs filed their lawsuit in January 2022. They never claimed that Rice was need-aware; however, the Section 568 exemption only permits collaboration among groups of fully need-blind universities. Rice should have known that some of the other universities in the eponymous 568 Presidents Group were need-aware, the plaintiffs argued, thus Rice participated in illegally limiting financial aid.

Rice maintains that it did nothing wrong.

“Rice is committed to transforming the lives of students and supporting Owls of all socioeconomic backgrounds through its generous, loan-free financial aid programs and need-blind admissions,” said Jeff Falk, Rice’s assistant vice president for strategic communications. “The university never conspired to decrease aid for its students.”

What is a class action lawsuit, anyway?

In a class action lawsuit, a handful of plaintiffs file a complaint on behalf of a larger group, known as the “class.” The lead plaintiffs take a larger cut of the total settlement money, as do the lawyers, who can make millions of dollars from a big case. 

After the settlement is approved, the court-appointed settlement administrator will typically notify people if they could be eligible to join the class.

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